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Financial Supervisory Service www.fss.or.kr For release at noon, July 14, 2021 Amendments proposed to the Enforcement Decree of the Act on External Audit of Stock Companies The Financial Services Commission proposed amendments to the Enforcement Decree of the Act on External Audit of Stock Companies in order to postpone the effective date for consolidated internal accounting control system for one year and provide legal grounds for self-quality control of auditors and sanctions against auditors that fail to meet the registration requirements.

• Listed companies with KRW2 trillion or more in assets were originally required
  to establish, operate, and receive external audit on their consolidated internal accounting control systems from 2022. The effective date for the requirement is postponed for one year until 2023 in consideration of difficulties companies face in setting up the consolidated system during the COVID-19 pandemic.
• Listed companies seeking an early implementation may do so according to the
  initial schedule.
• Self-quality control standards are specified to allow auditors to assess their audit
  quality on their own. Auditors must self-assess the level of quality control every business year and submit the results to the Securities and Futures Commission within a specified time period (e.g., four months after the end of the business year).
• Rules are provided to ensure auditors continue to meet the registration obligations
  and impose sanctions on auditors that fail to comply. Auditors registered with listed companies must assess their compliance with registration qualifications and submit the results to the Financial Services Commission. Disqualification score will be given to those that fail to meet the qualifications depending on the level of disqualification. The amendments are expected to take effect at the end of 2021. Announcement of Rule Changes

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Financial Supervisory Service www.fss.or.kr

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Contact Persons:
Accounting Review Department
Kim Eun-jo (Director General)
02-3145-7700
Kim Cheol-ho (Deputy Director General)
02-3145-7702
Corporate Accounting Administration Department Park Hyeong-joon (Director General) 02-3145-7750 Kim Se-dong (Team Head) 02-3145-7752 Auditor Oversight Office Min Bong-gi (Director) 02-3145-7860 Kim Jong-keun (Team Head) 02-3145-7862